Tourism Ministry announces new incentives for budget hotels

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New Delhi, Dec 12 (UNI) Aimed at attracting more investment in budget hotel sector, the Union Tourism Ministry has announced a revised incentive scheme the highlight of which is that subsidy is based on rooms created.

Under the revised scheme, the incentive to one star hotel would be Rs two lakh per room subject to a maximum of Rs 30 lakh.

Two star hotels would get an incentive of Rs three lakh per room, subject to a maximum of Rs 75 lakhs. The incentive to three star hotels and heritage basic category would be Rs three lakh per room, but the maximum ceiling would be Rs one crore.

Tourism Ministry sources said the scheme would become operational from the current financial year.

''The focus of the scheme is towards creating additional room capacity. Therefore, the subsidy is on the basis of rooms created,'' the sources said.

The scheme is valid all over the country, including hotel projects in the metro cities. In the earlier scheme, which has been in vogue for the last two decades, hotels in Metro cities were not eligible for incentive.

The sources said the maximum amount to be claimed has been enhanced in view of the increase in the cost of hotel projects.

It was clarified that the subsidy had no relation to the loan taken or interest paid as was in the earlier schemes. ''This is more entrepreneur friendly, as it envisages payment of subsidy direct to the hotel without going through the bank or financial institutions, thus reducing paper work.'' UNI SH KD HS1553

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